Gilead Q1 2026 slides: HIV surge drives guidance raise despite M&A costs

Gilead Sciences Inc. (NASDAQ:GILD) presented its first-quarter 2026 financial results on May 7, 2026, reporting better-than-expected performance that prompted the company to raise its full-year revenue guidance by $400 million. The biotechnology giant delivered non-GAAP diluted earnings per share of $2.03, beating analyst forecasts of $1.90, while revenue reached $7.0 billion compared to the projected $6.91 billion.

Despite the earnings beat, Gilead’s stock declined 1.64% in after-hours trading to $136.02, likely reflecting investor concerns about the near-term impact of significant acquisition-related costs. The company’s shares trade within a 52-week range of $96.19 to $157.29, with a market capitalization of $166.4 billion and a P/E ratio of 19.78.

Gilead’s base business—excluding COVID-19 treatment Veklury—demonstrated robust momentum with product sales of $6.8 billion, representing 8% year-over-year growth. Total product sales reached $6.9 billion, up 5% year-over-year, though down 12% sequentially due to normal first-quarter seasonality and inventory dynamics.

As illustrated in the company’s quarterly performance breakdown, the HIV franchise led growth with $5.0 billion in sales, up 10% year-over-year, while oncology products generated $810 million, up 7% year-over-year.

The quarter-over-quarter decline reflected typical seasonal patterns, including inventory drawdown following year-end builds and lower average realized prices due to channel mix shifts. However, the underlying demand trends remained strong across Gilead’s key therapeutic areas.

Gilead’s HIV business delivered standout performance, with total sales of $5.0 billion representing 10% year-over-year growth. The franchise benefited from strong demand for Biktarvy, the company’s flagship HIV treatment, as well as breakthrough uptake of Yeztugo (lenacapavir) for pre-exposure prophylaxis (PrEP).

The following chart demonstrates the consistent growth trajectory of Gilead’s HIV product portfolio across global markets:

Biktarvy maintained its market-leading position with $3.4 billion in quarterly sales, up 7% year-over-year. The treatment holds more than 52% market share in the U.S. HIV treatment market and remains the number one prescribed regimen for both treatment-naïve patients and those switching therapies across most major markets.

The company’s HIV PrEP portfolio showed exceptional growth, with the overall U.S. PrEP business expanding 87% year-over-year, significantly outpacing the approximately 14% growth rate of the broader U.S. PrEP market.

Yeztugo, Gilead’s long-acting injectable PrEP option launched in late 2025, generated $166 million in first-quarter sales, up 72% sequentially and exceeding internal expectations. The product has achieved blockbuster status within its first year and now leads the long-acting injectable segment in switch patients while gaining momentum among treatment-naïve individuals. Gilead raised its full-year Yeztugo sales forecast to approximately $1 billion, an increase of $200 million from prior guidance.

Trodelvy, Gilead’s antibody-drug conjugate for metastatic triple-negative breast cancer, continued its strong commercial trajectory with $402 million in sales, up 37% year-over-year and 5% sequentially. Growth was driven by increased demand across all breast cancer indications in all geographic regions.

The following regional breakdown illustrates Trodelvy’s expanding global footprint:

The product is now approved in more than 60 countries and holds the number one market share in second-line metastatic triple-negative breast cancer. Regulatory decisions for first-line use in both PD-L1 positive and negative metastatic triple-negative breast cancer are expected in the second half of 2026.

In liver disease, Livdelzi (seladelpar) for primary biliary cholangitis demonstrated impressive launch momentum with $133 million in sales, up 230% year-over-year. The product has captured more than 50% market share in second-line PBC in the United States.

Total liver disease product sales reached $767 million, up 1% year-over-year, with Livdelzi’s growth partially offset by inventory normalization and lower hepatitis C patient starts.

Gilead made significant strategic investments during the quarter to bolster its long-term pipeline, completing the acquisition of Arcellx and announcing planned acquisitions of Ouro Medicines and Tubulis. These transactions enhance the company’s capabilities in cell therapy, inflammation, and antibody-drug conjugate platforms.

The company’s comprehensive pipeline now includes 47 clinical programs, 4 clinical opt-in assets, and 3 clinical assets pending acquisition, representing what CEO Daniel O’Day described as "the most robust launch pipeline in Gilead’s history."

The Arcellx acquisition brings anitocabtagene autoleucel (anito-cel), a BCMA-targeted CAR-T therapy for relapsed/refractory multiple myeloma, with a PDUFA date of December 23, 2026. The Tubulis platform adds next-generation antibody-drug conjugate technology, including TUB-040 for platinum-resistant ovarian cancer, which is demonstrating best-in-class potential in early clinical studies.

Lenacapavir, Gilead’s long-acting capsid inhibitor, forms the foundation of a broad HIV pipeline spanning multiple administration frequencies and patient populations.

Gilead reported strong first-quarter financial metrics, with product gross margin expanding to 87%, up 2 percentage points year-over-year. Non-GAAP operating income reached $3.3 billion, up 13% year-over-year, while the operating margin improved to 47% from 43% in the prior-year period.

The company’s detailed financial performance reflects strategic investments in virology and commercial infrastructure:

Research and development expenses remained relatively flat year-over-year at $1.4 billion, reflecting higher investment in virology clinical manufacturing offset by lower oncology clinical study activity. Selling, general, and administrative expenses increased 12% to $1.4 billion, primarily due to higher sales and marketing costs related to the Yeztugo launch.

Based on strong first-quarter performance, Gilead raised its full-year 2026 product sales guidance to a range of $30.0 billion to $30.4 billion, up $400 million from prior guidance. The company expects base business growth of 5% to 6% year-over-year and raised its HIV sales growth forecast to 8% year-over-year.

However, the significant business development activity materially impacts near-term earnings. The completed Arcellx acquisition and expected Ouro Medicines and Tubulis transactions collectively reduce non-GAAP diluted EPS by approximately $9.50 per share, primarily due to upfront payments totaling approximately $11.5 billion and associated financing costs.

The following reconciliation illustrates the impact of these strategic investments on earnings guidance:

Excluding the business development upfront payments and financing costs, Gilead’s illustrative non-GAAP diluted EPS guidance of $8.45 to $8.85 remains in line with the company’s February guidance, demonstrating the underlying strength of the base business.

Gilead is positioned for up to four potential product launches in 2026, representing a significant inflection point for the company’s commercial portfolio.

The bictegravir/lenacapavir (BIC/LEN) combination for virally suppressed people with HIV has been filed with the FDA, with a PDUFA date of August 27, 2026. The once-daily oral regimen combines bictegravir, the most prescribed integrase inhibitor, with lenacapavir, targeting approximately 5% to 6% of people with HIV on complex regimens.

Hepcludex (bulevirtide) for hepatitis delta virus, already approved in the European Union, awaits an FDA decision expected later in the second quarter of 2026. Trodelvy regulatory decisions for first-line metastatic triple-negative breast cancer are anticipated in the second half of 2026, while anito-cel for fourth-line plus relapsed/refractory multiple myeloma has a December 2026 PDUFA date.

The company’s comprehensive milestone roadmap demonstrates execution across multiple therapeutic areas:

All key 2026 milestones remain on track, including Phase 3 updates for the islatravir/lenacapavir (ISL/LEN) once-weekly oral HIV treatment combination expected later in the second quarter, and Phase 3 updates for Trodelvy in lung cancer and endometrial cancer anticipated in the second half of the year.

Gilead’s presentation included extensive forward-looking statements subject to risks and uncertainties, including the ability to achieve full-year 2026 financial guidance, successful commercialization of new products, regulatory approvals, and competitive dynamics. The company noted that Medicare Part D pricing, Affordable Care Act subsidies, government pricing agreements, and evolving regulatory policies could impact future performance.

CEO Daniel O’Day stated, "Our strong Q1 performance underscores Gilead’s ability to execute on our strategic priorities and deliver value across our portfolio," emphasizing the company’s commitment to innovation and its robust pipeline, particularly in HIV treatment and prevention.

The company maintains its capital allocation priorities, including continued investment in R&D, business development transactions, dividend growth, and share repurchases primarily focused on offsetting equity dilution. During the first quarter, Gilead paid approximately $1 billion in dividends and repurchased $419 million worth of shares.

With a dividend yield of 2.45% and 11 consecutive years of dividend increases, Gilead continues to balance growth investments with shareholder returns. The company’s adjusted debt to adjusted EBITDA ratio improved to approximately 1.48x as of March 31, 2026, down from 1.84x a year earlier, providing financial flexibility for continued strategic investments.

Full presentation:

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